Futures fall ahead of Fed meeting, corporate earnings
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[January 25, 2022] (Reuters)
- U.S. stock index futures fell on Tuesday
following a turbulent start to the week, with investors keeping an eye
out for the Federal Reserve meeting and a host of major earnings from
companies including Microsoft.
The Fed is expected to convene its two-day monetary policy meeting later
in the day, which will be watched closely for cues on the central bank's
timeline for hiking key interest rates to combat inflation.
Fed funds futures traders are pricing in a 25 basis points hike in
March, in addition to three more rate increases by the end of the year.
The quarterly earnings season is in full swing, with megacap growth
companies Microsoft, Apple and Tesla reporting this week, following a
series of mixed results from big banks and disappointing numbers from
pandemic darlings such as Netflix.
Earnings from S&P 500 companies are expected to grow 23.7%
year-over-year, according to IBES estimates from Refinitiv.
IBM jumped 1.9% in premarket trading after the IT giant beat Wall Street
estimates for revenue and profit in the fourth quarter, as its focus on
the cloud paid off.
Geopolitical tensions between the West and Russia over Ukraine have
added to uncertainty. The U.S. Department of Defense said about 8,500
American troops were put on heightened alert.
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A screen charts the Dow Jones Industrial Average during the trading
day on the floor of the New York Stock Exchange (NYSE) in New York
City, U.S., January 24, 2022. REUTERS/Brendan McDermid
U.S equities had a turbulent start to the week with the S&P 500 coming close to
confirming a 10% correction on Monday.
At 6:53 a.m. ET, Dow e-minis were down 265 points, or 0.77%, S&P 500 e-minis
were down 58 points, or 1.32%, and Nasdaq 100 e-minis were down 269.25 points,
or 1.86%.
Microsoft fell 0.9% ahead of its quarterly results after markets close, while
Wells Fargo, which was down 1.1%, led declines among the shares of major Wall
Street lenders.
Nike Inc rose 1.3% after Wells Fargo upgraded the company's stock to
"overweight" from "equalweight".
Investors will be eyeing consumer confidence data later in the day for clues on
economic health after the resurgence of COVID-19 cases due to the Omicron
variant.
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by
Shounak Dasgupta)
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